Pernod Ricard will close one of its distilleries in the US after a review of its operations in North America found it had “significant excess capacity” on the continent following the takeover of Allied Domecq.

Pernod’s US arm said yesterday (19 April) that its plant at Lawrenceburg, Indiana would close by the middle of 2008, with around 400 jobs under threat. A phased closure of the site is expected to begin next year.

Alain Barbet, president and chief operating officer of Pernod Ricard USA, said the review “clearly showed” that the company had “significant excess capacity” in North America, leading it to the “painful conclusion” to close the Lawrenceburg site.

“The plant closing should not be interpreted as a negative reflection on the Lawrenceburg employees,” Barbet said. “However, as often happens in industry when acquisitions occur, the company simply had to ensure that our operations structure was organised to meet the ongoing needs of the business.

“Factors such as Lawrenceburg’s dependence on third-party contracts – combined with the costs and complexity that would have been incurred by relocating other Pernod Ricard USA business here – ultimately were too much to overcome.”

Barbet said Pernod would hold talks with union officials on severance packages, adding that the company would look for outside offers to buy the site.

Pernod owns four other sites in North America, three in the US and one in Canada.